Resellers Find Treasure Trove In Returned Goods

The holiday season brings in a staggering number of returns for eCommerce sales: According to estimates from CBRE, online returns could reach $37 billion amid the gift-giving season. Some of those unwanted items, however, don’t end up being resold by retailers themselves. They fall into the hands of entrepreneurs who scour liquidation and auction websites for items like routers, televisions and printers. These sellers, in turn, are reportedly listing these items back on the websites of eCommerce merchants to offer up for a profit.

The budding entrepreneur can bring in millions through this activity. One reseller, who began selling items on Amazon four years ago, told CNBC that he took in $18 million in sales in just 2017 alone. Another Amazon seller, who reportedly left his job to sell on the site, told the outlet that he believes reselling business is growing at a fast clip. One factor behind the rise, he believes, is YouTube videos filmed by people who excitedly buy boxes of returned items from liquidation websites.

One YouTube user, for instance, posted a video this summer entitled “Amazon Returns Pallet Unboxing.” He noted that he bought the pallet for just $250 and received goods that were valued at close to $2,000 in return. One item included in the pallet were wireless headphones, which the report noted sell for roughly $328 alone. Not all products that YouTubers purchase, however, turn out to be quality items that they can resell. One user made a product-testing video for the pallet that she received, which showed that some of her purchases were defective — and other products, such as a razor, were clearly used.

Those who make online videos — or pretty much any other consumer — can turn to places like Liquidation.com to purchase lots and lots (and lots) of items. That company works with major brick-and-mortar and eCommerce retailers alike to combine returns into pallets and boxes that are sold at a deep discount. Scott Birlew, the manager of the company’s Garland, Texas warehouse told Dallas News in November that the offerings are full of surprises: “You don’t know what you’re going to get, and you’re pretty sure there’s something there you’re going to like. You just don’t know what it is yet.”

The Liquidation And Returns Market

Items come into warehouses — like Liquidation.com’s Texas location — by the truckload. According to the Dallas News report, most products are, in fact, returns. Other products, however, are salvage goods or so-called shelf-pulls: That is, they are products that are surplus or have become obsolete by something new and improved. Still, Birlew told the outlet that 28 percent of all gifts bought during the holidays last year were returned and created “a gold mine of inventory for our buyers, and of course at great prices.”

According to liquidation marketplace B-Stock Solutions, roughly one-third of consumers will return an item after the holidays — and those returns add up to more than $90 billion in value. Some product categories, such as toys and seasonal items, lead the pack for product returns. And B-Stock found that the number of truckloads of returned merchandise doubles in the first quarter when inventory from its clients skyrockets by 60 percent.

In all, a quarter of returns happen over the holiday season. The number of returns, too, is on the rise: Returns were up 50 percent from 2015 and 35 percent from 2016 as of last year. And that isn’t too hard to imagine as the digital shopping experience makes it easier for customers to take a chance, because if a customer doesn’t like an item that she bought online, she can return it sender without much of a hassle.

“If they don’t, the customer is one click away from a retailer that is providing that risk-free return experience,” B-Stock Founder and CEO Howard Rosenberg told PYMNTS in a recent interview. “The cost of doing business is making returns simple.”

Will the number of customer returns continue its rise this holiday season as retailers aim to provide an easy return experience to their customers? That remains to be seen, but, for all the customer returns coming into liquidators by the truckload, there might be liquidators waiting in the wings to sell them to resellers online.